Bill Gates & Big Pharma

Published on: July 4th, 2005

Modified on: August 31st, 2006

Bill Gates is [alledgedly] giving 95% of his wealth for africa but.. get this.. its for vaccinations, and immunization of the children.Looks like it'll be a good intention, but with disastrous results, considering what we already know is in the vaccinations. sad.

I wonder if he is diversifying his investments and has bought shares in the pharmaceutical industry so he is just transferring his money into a new business venture whilst "looking" as though he is giving it away.

Bill Gates has sold almost half a billion dollar's worth of Microsoft stock this year, and begun to invest heavily in big pharma. In the second half of this year he bought 2.5 million shares in Eli Lilly, manufacturer of Prozac, and also made major investments in Merck and Pfizer, notes /Information Week/.

The 9 million shares Gates relinquished represent only a tiny proportion of Chairman Bill's MSFT holdings, or about 1.36 per cent.

Eli Lily's patent on Prozac expired a year ago, but the company has sought to widen its appeal, combining its with other drugs and marketing it as a kind of MSG of anti-depressants.

"Companies are getting a lot more creative in ways to sustain the product lifespan of drugs," a J.P. Morgan told The Street.

In sickness and in wealth, big pharma remains the most profitable industry in America. No doubt Gates took comfort in the Bush administration's indulgent attitude towards the inflated prices charged by the pharmaceutical industry. Although nine out of ten drugs fail clinical tests, the industry - which argues that high prices are needed to justify R&D - spends two and half times as much on marketing than on research, according to Families USA .

(I'll defer to our very own Thomas C Greene, who covered the industry in detail).

A crack about anxiety-inducing computer software would simply be too cheap, so we won't dream of making it here.

THE BILL AND MELINDA Gates Foundation has purchased shares in nine big pharmaceutical companies valued at nearly $205 million -- an investment likely to attract attention more for its symbolism than its size.
The foundation, the nation's largest with an endowment of $24.2 billion from Microsoft Corp. Chairman Bill Gates and his wife, already is a major force in international health issues, contributing $555 million in 2000 alone to global health programs. The organization has emerged as a prominent voice in the debate over how to supply cheaper drugs for AIDS and other diseases to poor countries. At times, it has assumed the role of a broker between poor nations and drug companies.

Now, as an investor in Merck & Co., Pfizer Inc., Johnson & Johnson and others, the Gates foundation has a financial interest in common with makers of AIDS drugs, diagnostic tools, vaccines and other drugs. The stock purchases are a new type of investment for the foundation: In the past it held primarily bonds and other nonequity investments.

Joe Cerrell, a spokesman for the Seattle-based Gates foundation, says the stock investments, reported this week in a Securities and Exchange Commission filing, are independent of the foundation's programs. Indeed, they might just be good investments, as beaten-down drug stocks are generally cheap these days. The stocks were chosen by money manager Michael Larson, who selects investments for the foundation and for Mr. Gates personally through an entity called Cascade Investment LLC. Mr. Larson, through a spokesman, declined to comment about the rationale.

The foundation's investments in "Big Pharma" could spur controversy, given Mr. Gates' staunch support of strict intellectual-property protections for drugs in poor countries. Mr. Gates' stance on intellectual property is as important to Microsoft's software business as it is to drugmakers.

"The impression people have, because of the types of projects Gates has funded and because of his Microsoft background, is that he has an ax to grind on the intellectual property front," says James Love, director of the Consumer Project on Technology, who works with African officials to obtain low-cost drugs.

Poor countries have sometimes threatened to seize patents in order to produce affordable generic drugs for sick citizens, making the field of intellectual-property law a flash point between pharmaceutical companies and poor countries. At a meeting in Africa last year, Mr. Love says he was struck by fears of officials from Botswana and elsewhere that pressing for access to generic drugs could jeopardize their chances for contributions. "They thought it would alienate the Gates foundation and they thought that was a problem," Mr. Love says.

A report issued last year by the Commission on Macroeconomics and Health, chaired by economist Jeffrey Sachs, made a strong defense of intellectual-property protection as critical to continued investment in drug research and development. The Gates foundation was a major sponsor of the commission.

Other people involved with the issue say medical progress in poor countries depends on incentives for drug makers, and the Gates foundation is balancing the tradeoffs responsibly. "For every major killer of the poor, we need better drugs, better diagnostics and better vaccines," says Richard Feachem, director of the Institute for Global Health at the University of California, San Francisco. "That means massive investments in research and development. Much of that has to come from Big Pharma and biotech companies."

The foundation's Mr. Cerrell dismisses as "speculative" the suggestion of conflict between financing drugs and investing in stocks. He says adds that pharmaceutical makers "play an important part in meeting our goals of providing equity and access and lifesaving vaccines and other advances in medicine to those who need it most."

Managing the foundation's multiplying ties with the drug industry could get tricky. For example, through its funding for the Global Alliance for Vaccines and Immunizations, the foundation pays for purchases of vaccines from some of the same pharmaceutical makers in which it now owns shares. A Gates foundation representative sits on the 18-member board of the Global Fund to Fight AIDS, Tuberculosis and Malaria, which is expected to become a major buyer of drugs to fight those diseases. The foundation has pledged $100 million to the fund, which has so far collected $2.2 billion. UC's Mr. Feachem, recently appointed to head the Geneva-based fund, argues that its massive buying power could create a strong "pull factor" spurring drug makers to develop inexpensive products. "For the industry, that would lead to the development of a high-volume, low-margin market, which could be a win for them as well," he says.

Mr. Gates has forged other ties with the industry. Microsoft last year named Merck Chief Executive Raymond Gilmartin to its board of directors. Mr. Gates worked with Mr. Gilmartin to launch the vaccine fund and also helped Merck with an AIDS program in Botswana.

The foundation's stock holdings include just two other stocks: Cox Communications Inc. and Waste Management Inc. The spokesman for Mr. Larson, the money manager, confirms that the drug investments represent a significant increase in the foundation's equity holdings, though they represent less than 1% of its total portfolio.

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Building Bridges

The Gates Foundation's top five stock investments in pharmaceutical firms, in millions:

Bring back Jayson Blair! The New York Times has eliminated the scourge of plagiarized journalism by eliminating journalism altogether from its front page.

Check this Sunday’s edition: “Bill Gates is no ordinary philanthropist,” gushes a Times reporter named Stephanie Strom, re-writing one of the digital diva’s self-loving press releases. Gates has saved 100,000 lives by providing vaccines to Africans, gushes Strom, according to someone on the payroll of … Bill Gates. And he’s making drugs for Africans, especially for AIDS victims, “cheaper and easier.” Strom knows because she asked Bill Gates himself!

Then we get to the real point of this journalistic Lewinsky: “Those who think of Mr. Gates as a ruthless billionaire monopolist … may find it hard to reconcile that image with one of a humorously self-deprecating philanthropist.”

Actually, that’s not hard at all.

Let me let you in on a little secret about Bill and Melinda Gates so-called “Foundation.” Gate’s demi-trillionaire status is based on a nasty little monopoly-protecting trade treaty called “TRIPS” – the Trade-Related Intellectual Property Rights rules of the World Trade Organization. TRIPS gives Gates a hammerlock on computer operating systems worldwide, legally granting him a monopoly that the Robber Barons of yore could only dream of. But TRIPS, the rule which helps Gates rule, also bars African governments from buying AIDS, malaria and tuberculosis medicine at cheap market prices.

Example: in June 2000, at the urging of Big Pharma, Bill Clinton threatened trade sanctions against Argentina for that nation’s daring to offer low-cost drugs to Southern Africa.

Gates knows darn well that the “intellectual property rights” laws such as TRIPS – which keep him and Melinda richer than Saddam and the Mafia combined—are under attack by Nelson Mandela and front-line doctors trying to get cheap drugs to the 23 million Africans sick with the AIDS virus. Gate’s brilliant and self-serving solution: he’s spending an itsy-bitsy part of his monopoly profits (the $6 billion spent by Gates’ foundation is less than 2% of his net worth) to buy some drugs for a fraction of the dying. The bully billionaire’s “philanthropic” organization is currently working paw-in-claw with the big pharmaceutical companies in support of the blockade on cheap drug shipments.

Gates’ game is given away by the fact that his Foundation has invested $200 million in the very drug companies stopping the shipment of low-cost AIDS drugs to Africa.

Gates says his plan is to reach one million people with medicine by the end of the decade. Another way to read it: he’s locking in a trade system that will block the delivery of cheap medicine to over 20 million.

The computer magnate’s scheme has a powerful ally. “The president could have been reading from a script prepared by Mr. Gates,” enthuses the Times’ cub reporter, referring to Mr. Bush’s AIDS plan offered up this week to skeptical Africans. The US press does not understand why Africans don’t jump for Bush’s generous offer. None note that the money held out to the continent’s desperate nations has strings attached or, more accurately, chains and manacles. The billions offered are mostly loans at full interest which may be used only to buy patent drugs at a price several times that available from other nations. What Africans want, an end to the devastating tyranny of TRIPS and other trade rules, is dismissed by the Liberator of Baghdad.

We are all serfs on Microsoft’s and Big Pharma’s ‘intellectual property.’ If Gates’ fake philanthropy eviscerates the movement to free Africans from the tyranny of TRIPS, then Bill and Melinda’s donations could have the effect of killing more Africans than then even their PR agents claim they have saved. And for our own Republic, we can only hope that when the bully-boy billionaire injects his next wad of loot into the Bush political campaign, he uses a condom.

My background is finance and accounting. As a socially conscious venture capitalist and philanthropist, I have a very good understanding of wealth management and philanthropy. I started my career in 1967 with the IRS as a specialist in taxation covering many areas of the tax law including the so-called legal loopholes to charitable giving. I have known for years that a smart wealthy person could keep control of all his assets without estate or income taxes through cleverly structured charitable foundations. These foundations are perfectly legal and allow the donors to keep absolute control of all their money and power and accumulate enormous appreciation free of taxation. In 1967, the loopholes were outrageous and the law has tightened some of these tactics for the rich.

However, the Gates Buffet foundation grant is nothing more than a shell game in which control of assets for both Gates and Buffet remain the same.

THE ONLY DIFFERENCE IS THAT THE ACCUMULATION OF WEALTH BY THESE TWO WILL BE MUCH MORE MASSIVE BECAUSE THEY WILL NO LONGER HAVE TO PAY ANY TAXES.

The Gates Foundation now has about $60 Billion under the control of the wealthiest people in America. They do not have to sell any of their positions in the stocks that they put under the tax-exempt umbrella. Furthermore, they can vote their stock holdings the same as if they did before and they can make the same investment decisions about their considerable corporate holdings. Both Buffet and Gates exhibited the most predatory capitalistic practices as corporate executives and investors. Microsoft and Berkshire Hathaway are not models of socially responsible capitalism. That being said, this foundation will be in the long run richer than the Catholic Church, which has accumulated wealth and power for over
1500 years.

However, the results will be exactly the same. They will never liquidate enough of their assets to do any real good for the most onerous problem we have as humans; the worldwide poverty that is caused by the great disparity between the haves and the have-nots.

GATES WILL BE MORE POWERFUL THAN THE POPE

The Gates Foundation and the Catholic Church have the same goals. They are to keep the legacies for which they were created. For Bill Gates and Warren Buffet it is the control and legacy of family wealth as in the ancient days of the Pharos of Egypt. And by not paying any taxes, Gates will be more powerful than the Pope. I realize that this foundation has done more for disease research and education than any single government institution. But, that is just a condemnation of how little rich countries do for the less fortunate.

AND THE UNITED STATES IS ONE OF THE WORST EXAMPLES OF HOW LITTLE IT DOES FOR ITS OWN PEOPLE.

The great problems of the world today are a direct result of the wide disparity between the rich and poor. But, it is hard for the wealthiest to even look at this as an issue of most importance. Catholic Charities do a lot for the poor and I am sure that the Gates Foundation will do a lot for diseases of the poor. But, that is merely a band-aid for one of the symptoms of poverty. The real issue today is poverty.

The governments that keep their people in abject poverty while their leaders are obscenely rich from oil revenues cause many of the problems in the Middle East. But, even the poorest of their people now have access to satellite TV and Internet information that shows these people how much they are being exploited. The simple answer that they hate us for our freedom is absurd. They hate us because they see the wealthy and powerful as the cause of their suffering. As was the case in Germany in the 1920s, even a cultured society can succumb to irrationally violent leaders if they are hungry and poor. It is a human problem that we saw occur in a 1st world country.

The 1968 movie, The Shoes of the Fisherman was a fictional account of a new Pope who had the conscience to solve world poverty by giving away all the Church's assets. Below is a summary of the plot from www. imdb. com. http://jahtruth.net/darth.htm

"After twenty years in a Siberian labor camp, Kiril Lakota, the Metropolitan Archbishop of Lvov, is set free. The Catholic Archbishop is released and sent to Rome, where the ailing Pope makes him a Cardinal. The world is in a state of crisis - a famine in China is exacerbated by United States restrictions on Chinese trade and the ongoing Chinese-Soviet feud. When the Pontiff dies, Lakota finds himself elected Pope. But the new Pope Kiril I is plagued by self-doubt, by his years in prison, and by the strange world he knows so little about. This movie contains extensive information about Catholic faith & practice, as a television news reporter steps in from time-to-time to explain the procedures involved in selecting a new Pope."

OUR CHANCES OF SURVIVAL ARE MARKEDLY DECREASED

The movie was not great but it did emphasize the point I am making in this piece. Unless wealthy people and governments around the world recognize the threat that poverty has on humanity, our chances of survival are markedly decreased. And unless the major wealth of the world is used to help feed its people, the diseases caused by poverty will never be cured. The prevention of diseases, both physical and mental, caused by hunger and poverty are the real dangers we face. And with all the concentrated wealth, we have the capacity to give everyone enough to survive and still leave the wealthy with plenty of luxuries.

IF BILL GATES GAVE $29 BILLION AWAY AND KEPT ONLY $1BILLION HE WOULD STILL HAVE A WONDERFUL LIFE.

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